A company bought land for $100,000 a year before starting business. Total initial capital investment excluding land cost is $1 million, 80% of which is fixed capital investment. The product cost excluding depreciation was $200,000. Assume that all fixed capital investments can be depreciated on a straight-line basis over the 10-year life of the project. After 10 years, all depreciable items can be sold for $50,000. If the capacity of the facility is 100,000 units/year and the present value of the investment is $800,000, 

find the price of the product. (tax rate 20%, i=0.05).

Answer rating: 100% (QA)

To solve this problem we can use the present worth method to find the price of the product F... View the full answer